The Natural Resource Charter: A Common Framework for Strengthening Resource Governance

On 12 June, the Natural Resource Governance Institute, formerly the Revenue Watch Institute - Natural Resource Charter, will launch the second edition of the Natural Resource Charter—a set of principles for societies on how to best harness the opportunities created by extractive resources for development—at its annual charter conference in Oxford, England.

The charter provides a framework to support the efforts of governments, civil society, companies and donors to improve governance and management of natural resources. Its strengths lie in the breadth of the issues it covers and in the depth of expertise from those who are linked to the charter. The charter maps out the various decisions that countries need to take in order to transform resource wealth into development, moving from resource discovery to successful deal making, revenue management, public spending and private sector development. By covering these issues in a comprehensive way, the charter shows that countries’ decisions are interlinked and often lead to trade-offs in other policy areas.

In the four years since its inception, more than 200 experts from a diverse range of backgrounds, including government, academia, civil society and the private sector, have contributed to the Natural Resource Charter in some way. These experts are the lifeblood of the charter, and increasingly they are providing technical support to help countries use the charter to improve natural resource management. In this post, we reflect on three distinct ways that the charter is being used.

Three ways to use the charter

First, the charter is being used is as a summary text and an organizing framework for partnerships. The concise nature of the text means that it is a great starting point for decision makers squaring up against certain challenges. The Ministry of Mines and Petroleum in Afghanistan, for example, recently used the charter as the starting point for thinking about how it should engage with a broad array of ministries, departments and agencies involved in the management of resource wealth. While in Ghana, a partnership of G8 member countries has been using the charter to coordinate their activities with government, civil society and extractive companies to strengthen the country’s governance of oil.

A second way that the charter is being used is as a self-assessment tool. A benchmarking framework has been developed, which takes the twelve guiding precepts of the Natural Resource Charter and reinterprets them as guiding questions that can be used for self-analysis. In Tanzania, for example, the government is using this tool to inform a high-level policy prioritization process as it takes steps to ensure that recent discoveries of natural gas will contribute to the development of the country. Importantly, the benchmarking framework has been designed to ensure complementarity with other governance initiatives and standards, including the Extractive Industries Transparency Initiative (EITI) and the African Mining Vision. Speaking in January this year, President Earnest Bai Koroma of Sierra Leone said, “A benchmarking of our mineral management regime using the precepts of the Natural Resource Charter is in preparation and shall guide the update of our Core Minerals Policy [the guiding policy for the county’s burgeoning mineral sector].” This project aims to help bring the mining sector in line with the charter and the African Mining Vision and will also inform the country’s EITI workplan.

Elsewhere, civil society groups are using the charter benchmarking framework to monitor government management of natural resource wealth. In Ghana, the Civil Society Platform on Oil and Gas used the Charter in 2011 to create an Oil Readiness Report Card to evaluate preparations for the management of oil revenues. While in Nigeria, the Nigerian Natural Resource Charter (NNRC) are using the benchmarking framework to provide publically available scores using a traffic light scoring system. In their first report in 2012, they found the government wanting, giving nine red lights, three yellow lights and no green lights. This year the NNRC will revisit their scores to see if progress has been made, and plans are in place to do similar rescoring exercises on a biannual basis in the future.

The third way that the charter is being used is as the basis for training programs. Senior government officials from resource-rich developing countries have the chance to attend a week-long course at the Blavatnik School of Government at the University of Oxford, where they can learn from internationally renowned faculty as well as peers from other governments. Another course at the Central European University, in Budapest, gives civil society, government officials and staff from international organizations the chance to study issues presented in the charter. Both courses use the concepts and benchmarking framework provided by the charter.

What next?

Looking at the way the charter is being used, it is clear that both government officials and oversight actors need better information to do their jobs. While the charter framework helps decision makers and opinion makers become better consumers of advice, significantly more work needs to be done to improve data available in these settings. Initiatives like EITI are a substantial start, complementing data from Dodd-Frank, European Commission regulations and other aspects of resource governance. As for how this might be done, the charter conference aims to provide some answers.

Rob Pitman is NRGI’s governance program officer. David Manley is NRGI’s economic analyst.

The 2014 Natural Resource Charter conference—themed “Strengthening Resource Governance: Policy and the Application of Measurement”—will take place June 12-13 in Oxford, England. For a list of speakers and topics, as well as a webcast of many of the sessions, please visit the NRGI website here.

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